Arcadia City Council rejects petition to repeal utility tax

ARCADIA >> Staffers presented a bleak picture to the City Council of what would happen to services if $6.7 million in revenue was lost in light of a citizens’ petition to repeal taxes the city charges on utilities.

Thirteen police officers would be cut. A fire station would close. Cuts in monitoring property violations and illegal businesses would increase blight. Street sweeping would be reduced from weekly to every other weekly. Children’s programs would be eliminated and city library hours would be reduced by two days.

“We’re not creating a list just to shock and awe, we’re creating a list that is generally reasonable and factual,” City Manager Dominic Lazaretto told the council.

Taking the advice of City Attorney Stephen P. Deitsch, the council voted unanimously to reject the ballot measure and declined to place it on a future ballot.

Deitsch said there were three provisions in the measure that conflicted with the state’s constitution and laws. Among the concerns was a two-thirds majority requirement to repeal the measure. Only a simple majority is needed to enact the measure.

Three residents, backed by the California Tax Limitation Committee, in April submitted 770 signatures to repeal the city’s utility users tax.

“Although we question the legality of the city’s refusal to place the initiative on the ballot, they have raised some potentially legitimate legal issues which we have referred to our legal team for review,” said TeaPAC President Michael Alexander.

If needed, the group will revise its petition and refile, he said.

The effort is part of statewide movement to repeal the utility taxes in the 150 cities and four counties where the tax is imposed.

Petitions were circulated in Glendale, Pasadena and South Pasadena, but the working group failed to reach enough signatures to qualify for the ballot. Alexander said there are plans to re-circulate petitions in the coming months.

The measure’s local proponents say the initiative is a call to local governments to operate at lower costs.

“I am disgusted how government finds ingenious ways to confiscate and redistribute the wealth of those who produce it rather than finding ways to increase the overall amount of wealth,” Lawrence Papp of Arcadia told the City Council.

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“If you wanted to give the city a haircut, this isn’t it,” Councilman Tom Beck told Papp. “This is like cutting off a leg or a couple arms.”

In Arcadia, UUT revenues make up 13 percent of the city’s budget. The average Arcadian pays $7.22 per person per month on all UUTs combined, according to a city staff report.

A notice to circulate a petition was submitted last week in Sierra Madre. The group needs about 100 signatures to qualify for the ballot.

Earl Richey, a proponent in Sierra Madre, said the city needs to be more responsible in its handling of its finances.

“The city wants more revenue to give it more borrowing power, which will put us in even more debt,” Richey said.

This spring, Sierra Madre voters defeated a measure that would keep the utility tax at 10 percent through 2020. By rejecting the measure, the tax will decrease to 6 percent by July 2016.

City Manager Elaine Aguilar said the city will collect $2.4 million in UUT revenue this year or, 27 percent of the city’s total revenue.

“For a reduction of that amount of money it is not possible to take a little from here and a little from there,” she said. “It would mean completely changing the way the city provides services.”

Sandra Siraganian, chair of the 41st Assembly district Republican Central Committee and a leader in the effort to vote no on the UUT increase this spring, said she was opposed to a complete repeal of the tax.

“It’s probably the most destructive thing I have ever seen a group do,” she said.